TORONTO — Canada's main stock index rose on Friday, helped by gains in energy and base metal stocks as the prices of oil and copper climbed, while U.S. markets were mixed.
Markets drifted Friday after a week that saw Wall Street hit new highs with relief over the latest inflation figures. The Dow closed above 40,000 points for the first time, rising 134.21 points at 40,003.59.
The S&P 500 index was up 6.17 points at 5,303.27, while the Nasdaq composite was down 12.35 points at 16,685.97.
The S&P/TSX composite index closed up 165.54 points at 22,465.37.
The latest U.S. inflation data showed evidence that price growth continues to cool, rekindling some hope among investors that 2024 will bring interest rate cuts from the U.S. Federal Reserve.
“People are quite bullish,” said John Zechner, chairman and lead equity manager at J. Zechner Associates.
“The economy’s slowing down a little bit, not enough to go into recession, but ... enough to keep the rate cuts still on the table, even though maybe not as much as expected at the beginning of the year,” he said.
“Everyone still believes the next move in rates will be down, whenever it comes, and in the meantime the economy is still hanging in there.”
The inflation print made a September cut look more likely in the U.S., said Zechner, as long as economic data continues to slowly trend downward.
The current bullishness is helped by a round of earnings that largely didn’t disappoint, added Zechner.
Capping off U.S. earnings season next week will be Nvidia, the chipmaking giant whose stock has been a major factor in the rally over the past several months.
Expectations are high for Nvidia, said Zechner, but it will likely still beat them.
The past week also saw a short-lived resurgence in “meme stocks” like GameStop, which gave back much of what it gained earlier in the week after announcing plans to raise cash and predicting a loss for its latest quarter.
In Canada, where interest rate cuts are likely coming sooner than they are in the U.S., gains in copper and oil helped the TSX rise by 0.74 per cent. The energy index was up 1.15 per cent while the base metals index was up 4.03 per cent.
"Copper stocks have been through the roof and they've been leading most of the advances here," said Zechner.
The Canadian dollar traded for 73.45 cents UScompared with 73.42 cents US on Thursday.
The June crude oil contract was up 83 cents at US$80.06 per barreland the June natural gas contract was up 13 cents at US$2.63 per 1,000 cubic feet.
The June gold contract was up US$31.90 at US$2,417.40 an ounceand the July copper contract was up 17 cents at US$5.05 a pound.
— With files from The Associated Press
This report by The Canadian Press was first published May 17, 2024.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD)
Rosa Saba, The Canadian Press
